Martinez v. Hongkong and Shanghai Bank

G.R. No. L-5496, 19 February 1910

FACTS:

Plaintiff seeks to annul a contract on the ground that her consent was obtained under duress. Under the contract, she agreed to convey several properties to Aldecoa & Co. and HSBC as a settlement of their claims against her and her husband, who fled the country. It was established at the trial that during the period of negotiation, representations were made to her by the defendants and concurred in by her lawyers, that if she assented to the requirements of the defendants, the civil suit against herself and her husband would be dismissed and the criminal charges against the latter withdrawn, but if she refused, her husband must either spend the rest of his life abroad or be criminally prosecuted.

ISSUE:

WON there was duress which would invalidate the contract.

RULING:

No. There is no duress that will invalidate the contract.

Article 1335 of the Civil Code in its last paragraph provides that: “A threat to enforce one’s claim through competent authority, if the claim is just or legal does not vitiate consent”.

In order that this contract can be annulled it must be shown that the plaintiff never gave her consent to the execution thereof. It is, however, necessary to distinguish between real duress and the motive which is present when one gives his consent reluctantly. A contract is valid even though one of the parties entered into it against his wishes and desires or even against his better judgment. Contracts are also valid even though they are entered into by one of the parties without hope of advantage or profit. A contract whereby reparation is made by one party for injuries which he has willfully inflicted upon another is one which from its inherent nature is entered into reluctantly by the party making the reparation. He is confronted with a situation in which he finds the necessity of making reparation or of taking the consequences, civil or criminal, of his unlawful acts. He makes the contract of reparation with extreme reluctance and only by the compelling force of the punishment threatened. Nevertheless, such contract is binding and enforceable. Petition is dismissed.